Top Small-Cap Stocks for May 2022

Small-cap stocks are public companies that have market capitalizations ranging from $300 million to $2 billion. Since the share prices of these companies can be very volatile, some companies in the small-cap universe, or in small-cap indexes, can have market caps significantly higher than this range at any particular time. Some of the stocks classified as small caps are insurance company Genworth Financial Inc., printing and imaging company Eastman Kodak Co., and retail drugstore chain Rite Aid Corp.

Small-cap stocks, as represented by the Russell 2000 Index, have substantially underperformed the broader market, providing investors with a total return of -10.1% compared to the Russell 1000’s total return of 4.4% over the past 12 months. These market performance numbers and the statistics in the tables below are as of April 21, 2022.

Here are the top three small-cap stocks with the best value, fastest growth, and most momentum. The market valuations of some of the companies listed below are above the generally agreed upper limit of $2 billion for a stock to be considered small cap. This tends to happen in periods of higher volatility, especially for momentum stocks. However, they are still classified as small-cap because stocks are not re-indexed as rapidly as their price movement. Their valuations may drop later as volatility subsides.

These are the small-cap stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.

Best Value Small-Cap Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Hovnanian Enterprises Inc. (HOV) 46.45 0.3 0.6
Agios Pharmaceuticals Inc. (AGIO) 24.27 1.4 1.1
Shenandoah Telecommunications Co. (SHEN) 23.03 1.1 1.1

Source: YCharts

  • Hovnanian Enterprises Inc.: Hovnanian Enterprises designs, builds, and sells homes. Its products include both individual townhouses and condominiums as well as higher-occupancy dwellings across the U.S. Hovnanian reported Q1 2022 results for the period ending Jan. 31 on March 1. For that quarter, the company saw net income increase by 30.9% while total revenues decreased by 1.6% year-over-year (YOY). Strong demand for new homes in the quarter helped to drive the revenue performance.
  • Agios Pharmaceuticals Inc.: Agios is a clinical-stage biopharmaceutical company that focuses on developing therapies for genetically defined diseases such as sickle cell disease, pyruvate kinase deficiency (PK), and thalassemia. All three are blood disorders. On April 14, results from a company study of its drug PYRUKYND in adults with pyruvate kinase (PK) deficiency were published in the New England Journal of Medicine. PYRUKYND “successfully addressed the underlying cause of chronic hemolytic anemia in adults with PK deficiency,” according to he first author of the publication.
  • Shenandoah Telecommunications Co.: Shenandoah Telecommunications is a broadband services provider. It operates high-speed cable, fiber optic, and fixed wireless networks that provide broadband services to customers throughout the U.S.

These are the top small-cap stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Small-Cap Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Range Resources Corp. (RRC) 30.35 8.3 2,210 144.9
Civitas Resources Inc. (CIVI) 60.47 5.4 -14.9 715.0
Cross Country Healthcare Inc. (CCRN) 20.48 0.8 1,490 197.2

Source: YCharts

  • Range Resources Corp.: Range Resources is an independent natural gas and NGL producer. The company focuses on low-cost, high-return operations in the Appalachian Basin known as “stacked-pay” projects. These projects involve a single vertical well with the potential to yield oil at varying depths.
  • Civitas Resources Inc.: Civitas Resources is an oil and natural gas company. It develops and produces crude oil, natural gas, and natural gas liquids in Colorado. The company serves customers across the U.S.
  • Cross Country Healthcare Inc.: Cross Country Healthcare is a healthcare staffing company. It provides travel nurse, allied health, clinical research trials, and additional staffing services. On April 7, the company announced that Daniel J. White had joined Cross Country as its first chief commercial officer, responsible for overseeing sales, business development, program management, client, clinical and non-clinical services. White was most recently Chief Executive Officer (CEO) of Healthcareteams.

These are the small-cap stocks that had the highest total return over the last 12 months.

Small-Cap Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Peabody Energy Corp. (BTU) 24.51 3.6 609.6
CONSOL Energy Inc. (CEIX) 41.55 1.5 376.6
HighPeak Energy Inc. (HPK) 37.69 3.5 349.1
Russell 1000 N/A N/A 4.4
Russell 2000 N/A N/A -10.1

Source: YCharts

  • Peabody Energy Corp.: Peabody Energy is a coal mining company with mines across the U.S. and in Australia.. The company mines and markets low sulfur coal for use by electric utility providers.
  • CONSOL Energy Inc.: CONSOL Energy is a coal mining company. It produces and exports metallurgical and other coal products. It owns and operates productive longwall mining operations. The company reported results for Q4 2021, ended Dec. 31, on Feb. 8. Net income grew nearly eightfold as total revenue and other income climbed by 48.1% YOY. The results were driven by a sharp rise in coal revenue largely due to an increase in average revenue per ton sold. Total revenue also benefited from a $115.5 million pre-tax unrealized mark-to-market gain related to commodity derivatives. The company will report Q1 2022 earnings on May 3.
  • HighPeak Energy Inc.: HighPeak Energy is an independent crude oil and natural gas company which acquires, develops, and produces crude oil, NGL, and natural gas reserves. Its assets are located in Texas. On April 13 the company announced a quarterly dividend of $0.025 per share of common stock. The dividend will be paid on May 25 to shareholders of record as of May 2, 2022.

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